For Bonchon area franchises offered and sold in Maryland, what aspects of the Area Development Agreement can Maryland law supersede?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
MARYLAND ADDENDUM TO AREA DEVELOPMENT AGREEMENT
The following provisions will supersede anything to the contrary in the Franchise Disclosure Document or Area Development Agreement and will apply to all area franchises offered and sold under the laws of the State of Maryland:
The laws of the State of Maryland may supersede the Area Development Agreement, including the areas of termination and renewal of the Area Franchise.
Any claims arising under the Maryland Franchise Registration and Disclosure Laws must be brought within three years after the grant of the Area Franchise.
Section 18.13 of the Area Development Agreement ("Venue") requires venue to be limited to New York.
This provision is deleted from all Area Development Agreements for residents of the State of Maryland and/or area franchises to be operated in the State of Maryland.
The following sentences are added at the end of the last paragraph of Section 3.02 of the Area Development Agreement ("Rights We Reserve"):
- "The waivers and releases in this paragraph are not intended to nor will they act as a release, estoppel or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law.
The waivers and releases in this paragraph will not apply to claims arising under the Maryland Franchise Registration and Disclosure Law."
The following language is added to the end of Section 18.05 of the Area Development Agreement ("Integration of Agreement; No Oral Agreements or Representations"): "This Section is not intended to, nor will it, act as a release, estoppel or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law."
No statement, questionnaire, or acknowledgement signed or agreed to by a franchisee (or area developer) in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, for area franchises offered and sold in Maryland, the laws of Maryland may supersede the Area Development Agreement, specifically in the areas of termination and renewal of the Area Franchise. This means that certain provisions within the Area Development Agreement regarding how the agreement can be terminated or renewed may be overridden by Maryland state law.
Additionally, any claims arising under the Maryland Franchise Registration and Disclosure Laws must be brought within three years after the grant of the Area Franchise. This sets a statute of limitations for legal claims related to franchise registration and disclosure, ensuring that franchisees have a limited time frame to bring such claims.
Furthermore, the standard venue requirement in Section 18.13 of the Area Development Agreement, which limits venue to New York, is deleted for Maryland residents and area franchises operating in Maryland. This change allows Maryland franchisees to pursue legal action in a more convenient venue, rather than being restricted to New York. Certain waivers and releases within the Area Development Agreement will not apply to claims arising under the Maryland Franchise Registration and Disclosure Law, ensuring that franchisees do not unintentionally waive their rights under Maryland law.